MTN faces more problems in Uganda as authorities query its sales figures

Uganda accused the country’s biggest telecoms operator, MTN Uganda, on Tuesday of under-declaring its sales and causing public revenue losses, in a further souring of relations with the South African-owned company.

Uganda deported MTN Uganda’s Chief Executive Wim Vanhelleputte last week, the fourth MTN official to be expelled from the East African country in less than a month on accusations of compromising national security.

The company is a unit of South African telecoms giant MTN Group, which has also had problems in Nigeria where the central bank last year accused it of repatriating $8 billion without the correct paperwork. The row was later resolved after the company paid a token settlement.

MTN Uganda has over 10 million subscribers and competes chiefly with the local unit of India’s Bharti Airtel.

The company has also been under political pressure to list its shares on the local bourse to facilitate domestic ownership of the company and ensure more of the money it earns stays in the country.

Government spokesman Ofwono Opondo said scrutiny of MTN came after the government acquired the capacity to monitor telecom firms’ transactions for tax compliance and reporting purposes.

“It is as a result of that technical capacity that MTN and its officials have run afoul,” he said.

Ugandan President Yoweri Museveni has repeatedly accused telecom firms in the country of cheating taxes by underreporting the volume of their calls and data sales but has not named any companies.

MTN Uganda’s spokeswoman Justina Ntabgoba said the government had not been given any details of the alleged underreporting of transactions.
“We have not gotten any official communication, so we don’t have a response. Once we receive an official communication then we can respond,” she said.

He said the reasons were likely espionage or economic sabotage and that the motivation was still under investigation.

MTN’s Ntabgoba declined to comment on the accusations, saying only that the government had not informed the company of the reasons for the executives’ deportations.

MTN has been operating in Uganda since 1998 when it secured a 20-year operating license that expired last October.

In 2017 it began a process to obtain a 10-year extension but that has dragged on amid disagreements over the size of the fees to be paid for the extension and other issues.

The Uganda business contributes about 4 per cent of MTN Group’s earnings before interest, depreciation and amortisation.